LORD LINDLEY, LORD MACNAGHTEN, SIR ANDREW SCOBLE, SIR ARTHUR WILSON
body1903
DigiLaw.ai
Judgement Appeal from a decree of the High Court (Dec. 22, 1899) modifying a decree of the Subordinate Judge of Meerut (March 31, 1897). The suit was brought on a mortgage dated October 18, 1894, executed by the appellants vendors, Rewa and Sheo Singh, grandsons of one Bhup Kunwar, a Hindu widow, in favour of the respondent. It alleged a prior mortgage of 1893 by the same mortgagors in favour of the respondent and three other persons. The prayer was for sale of the mortgaged property free from the mortgage of 1893, which was to be satisfied out of the sale proceeds. The appellants in their written statement insisted that the bond of October 18, 1894, sued upon was without consideration. They further urged that the respondent and the three defendants, who were his co-mortgagees under the mortgage of 1893, were in a position of confidence reposed in them by the mort-gagors and their grandmother, and that they had by undue influence obtained " several documents without consideration in their favour and in favour of other defendants," i.e., the co-mortgagees under the deed of 1893, and " caused fictitious demands to be entered in the bonds, and took back after registration the amounts stated in the bonds to have been paid at the time of registration." Accordingly the bond of 1893 was also without consideration. It appeared that one Debi Singh died in 1889, and litigation forthwith arose as to whether he was at his death joint with or separate from the appellants, who were the heirs of his brother Kallu Singh. In the former case the appellants succeeded to his estate by survivorship; in the latter Bhup Kunwar was entitled as his widow with reversion to Rewa and Sheo, as his daughters sons. In that litigation the appellants, who were plaintiffs, were unsuccessful, but it was stated that the dispute led to confidential relations being established between the widow Bhup Kunwar and her grandsons on the one side, and the respondent with his three co-mortgagees under the bond of 1893 on the other side.
In that litigation the appellants, who were plaintiffs, were unsuccessful, but it was stated that the dispute led to confidential relations being established between the widow Bhup Kunwar and her grandsons on the one side, and the respondent with his three co-mortgagees under the bond of 1893 on the other side. The Subordinate Judge considered that " all these men formed a party and plotted together, and that having caught in their trap Bhup Kunwar, who being a woman, and Rewa and Sheo Singh, who, being very young, were ignorant, and stood in need of help on account of the disputes, made them write whatever they liked. These men spent something on their behalf, and gave them some money, but made them execute bonds according to their own choice." The Subordinate Judge considered that under these circumstances the mutual relations between the widow and her grand children, and the men who were either mortgagees under one or other of the mortgages recited in the plaint or were holders of prior bonds in satisfaction of which those mortgages were alleged to have been given, were such that, under s. Ill of the Indian Evidence Act, the respondent " ought to have proved each and every item in the prior bonds by producing an account thereof. The burden of proving every single item, even in the prior bonds held by Nanak Chand and Kishen Lall, lies on Jairaj." His view of the respondents case as presented before him was that " a detail of the expenses has not been given or proved from which the amount which was actually spent and the amount which was paid in cash to the executants of the bonds might be ascertained. It is very difficult to ascertain these amounts, but whatever will appear from the facts and probabilities of the case will be noted further on." Both Courts found that the respondent helped Bhup Kunwar and her grandsons in the litigation against the appellants, and that Jairaj, the respondent, had falsely denied it. The Subordinate Judge found that only Rs. 1250 was recoverable, as it was the only amount proved to have been paid. There was no doubt, he said, that the respondent had spent something in carrying on litigation, otherwise it would not have continued for years.
The Subordinate Judge found that only Rs. 1250 was recoverable, as it was the only amount proved to have been paid. There was no doubt, he said, that the respondent had spent something in carrying on litigation, otherwise it would not have continued for years. But, he added, the respondent has entirely failed to prove the series of monetary transactions stated to have taken place under the previous bonds, and not produced a single receipt or scrap of documentary evidence shewing what had actually happened. The High Court held that " from the mere fact that Jairaj helped these persons in the conduct of their cases it did not follow that there was any fiduciary relation between him and them." At the dates of the two bonds the litigation had successfully terminated, and there was nothing then in existence by reason of which the two grandsons were under the influence of the respondent. The High Court found that there was satisfactory evidence in favour of consideration having passed. Cowell, for the appellants, contended that the relations of active confidence found by both Courts to have existed between the respondent on the one side and the widow and her grandsons on the other, one of whom was a minor and the other very young and inexperienced, were not shewn to have been determined in 1893 and 1894. He referred to evidence of other litigation which continued to a later date in which the same active assistance was afforded. He submitted that, both under s. 111 of the Indian Evidence Act as well as on general principles of equity, it was for the respondent to prove the good faith of these transactions, and therefore the consideration for the two bonds in suit. Under the circumstances of the case, the onus lay on the respondent to prove what advances he had actually made. The lower Court had found that there was no evidence other than admissions made in the bonds. The High Court did not refer to any specific evidence to that effect, either books of account or receipts or other memoranda made at the time, or of the source or appropriation of the moneys alleged to have passed.
The lower Court had found that there was no evidence other than admissions made in the bonds. The High Court did not refer to any specific evidence to that effect, either books of account or receipts or other memoranda made at the time, or of the source or appropriation of the moneys alleged to have passed. Ross, for the respondent, contended that the plea of undue influence and active confidence under s. 111 was not made out as regards the years 1893 and 1894, when the grandsons had entered upon their inheritance and the widow was no longer engaged in litigation. It was therefore for the appellants to prove non-receipt of consideration, and the High Court was right in finding that there was satisfactory evidence of pay ments made to mortgagors, who reposed no special confidence in the mortgagee. [He was stopped by their Lordships.] Cowell replied. The judgment of their Lordships was delivered by SIR ARTHUR WILSON. One Debi Singh died in 1889, leaving surviving him a widow, Bhup Kunwar, two grandsons, daughters sons, and three nephews, brothers sons, Thakur Das, and his brothers. The widow claimed the succession to her husbands estate, but was opposed by the nephews. While the litigation thus caused was in progress, the widow had recourse to Jairaj, a money-lender, the present respondent, who assisted her in her litigation, and advanced or procured funds for its maintenance. This involved a series of transactions mainly embodied in documents, the actual execution of which is not disputed, and the details of which it seems unnecessary to examine. The controversy was finally decided in favour of the widow by the decree of the High Court of May 12, 1893. On July 21, 1893, the widow transferred her estate to her two grandsons. On July 25, 1893, the two grandsons executed a mortgage bond for Rs. 4000 in favour of Jairaj and others. The consideration was expressed to be the satisfaction of prior charges in favour of persons who may very likely have been connected with Jairaj, and a parol debt to Jairaj. On October 18, 1894, the two grandsons executed a further mortgage bond for Rs. 5000 in favour of Jairaj alone. The consideration was expressed to be the satisfaction of certain existing obligations and a fresh cash advance of Rs. 1250.
On October 18, 1894, the two grandsons executed a further mortgage bond for Rs. 5000 in favour of Jairaj alone. The consideration was expressed to be the satisfaction of certain existing obligations and a fresh cash advance of Rs. 1250. On September 8, 1895, the two grandsons with their grandmother conveyed the whole property to the nephews Thakur Das and his brothers. On October 26, 1895, Jairaj brought the present suit upon the mortgage of October 18, 1894. He made defendants, amongst others, his mortgagors, the two grandsons, their grandmother, and the three nephews as purchasers, and he asked that the sale proceeds of the property should be applied, first, in payment of a charge, which is not disputed, in favour of the nephews, defendants, secondly, in satisfaction of the mortgage bond of July 25, 1893, and, thirdly, in satisfaction of that of October 18, 1894. The questions in the case were as to the validity of the two mortgage bonds of July 25, 1893, and October 18, 1894. The substantial defendants were the now appellants—that is to say, the nephews Thakur Das and his brothers, and they set up a case of want of consideration, undue influence, and fraud, and an issue was raised accordingly. The mortgagor defendants, the two grandsons, told a detailed story leading to the same result as that aimed at by their co-defendants; but that story has been disbelieved by both Courts in India, and need not be further noticed. The Subordinate Judge who heard the case came to the conclusion that there was such a relation of active confidence between Jairaj and his mortgagors, within the meaning of s. 111 of the Indian Evidence Act, as to throw upon the former the burden of proof of the good faith of the transactions upon which he relied. He held further that Jairaj had failed to prove the consideration for either of the mortgage bonds in question except the cash advance of Rs. 1250 under the second instrument; and except to this extent he decided against the validity of the two mortgage bonds. The High Court, on appeal, dissented from the opinion of the Subordinate Judge that any relation of active confidence existed between Jairaj and his mortgagors at the dates of the mortgage bonds. Their Lordships agree with the opinion of the High Court upon this point.
The High Court, on appeal, dissented from the opinion of the Subordinate Judge that any relation of active confidence existed between Jairaj and his mortgagors at the dates of the mortgage bonds. Their Lordships agree with the opinion of the High Court upon this point. Whatever may be thought of the relations between Jairaj and the widow while he was dealing with her during the course of her litigation, their Lordships can see no sufficient evidence that during the later transactions there was any relation of active confidence between Jairaj and the grandsons within the meaning of s. 111 of the Evidence Act. The learned judges of the High Court arrived at another conclusion of much greater importance than anything affecting the burden of proof. They carefully examined the evidence, and were of opinion that the consideration for the two mortgage bonds in question was proved to the full extent. Their Lordships agree in this view. The contrary view taken by the Subordinate Judge appears to have resulted from two opinions which he had formed, first, that the conduct of Jairaj had been dishonest throughout the transactions in question, and, secondly, that practically all those concerned in those transactions were parties to a conspiracy to defraud; and for these opinions their Lordships, concurring with the High Court, can see no sufficient foundation. Their Lordships will humbly advise His Majesty that this appeal should be dismissed. The appellants will pay the costs.